INVESTMENT STRATEGY & INSURANCE REVIEWS NOW MANDATORY!

From 7 August 2012 all SMSF Trustees must conduct regular reviews of their SMSF Investment Strategy and consider Insurance for all members as part of this Investment Strategy.

These new prescribed operating standards mean Trustees MUST comply with regular annual reviews and consider insurance needs of the Fund’s members. (An annually updated investment strategy and meeting minutes will suffice to comply with these new regulations.)

Any decision to hold or not to hold a contract for life insurance and/or TPD insurance within the SMSF needs to be considered against any other insurance policies that the members hold – along with the overall strategy of the SMSF, the cost of premiums and the relation of that policy to specifically contributing to the retirement, death or disablement of a particular member.

This change in regulations does raise interesting questions and potential additional liabilities against Trustees. For example – If a member dies and their beneficiary (spouse/child) feels that the Trustee/s did not adequately consider the personal circumstances of each member when deciding to hold a contract for insurance, the Trustees may be held liable for inadequate insurance provided or offered!

Therefore it is imperative (and mandatory!) that your SMSF Investment Strategy and insurances are reviewed and, if required, updated each year!


Liability limited by a scheme approved under Professional Standards Legislation